Related
to the solicitation of public comments regarding Medicare's policy to rebill
for subsequently denied inpatient Part A stays under the Medicare Part B
outpatient hospital benefit (see News
Now article), the American Hospital Association
along with a number of hospitals across the country filed a lawsuit in US District Court (The American Hospital Association, et al. v.
Kathleen Sebelius, Case No. 1:12-cv-1770)
on November 1. In the lawsuit, the plaintiffs contend that the Medicare payment
denial policy is "arbitrary and capricious" as it unfairly denies
payment to hospitals for medically necessary services that are not statutorily
excluded under Medicare Part B. Therefore, the plaintiffs request that the
court grant a declaratory judgment affirming that the Centers for Medicare and
Medicaid Services' (CMS) payment denial policy is invalid and that CMS has
failed to promulgate a regulatory rationale for the application of this
arbitrary policy. In addition, the plaintiffs request that the court direct CMS
to pay the plaintiffs accordingly for the denied services under the Medicare
Part B benefit.

In its comments to CMS submitted September 4,
APTA urged the agency to consider the effect that payment for inpatient
hospital services under Medicare Part B might have on the therapy cap for
outpatient therapy services. Due to risk of denials when classifying patients
for an inpatient stay, APTA explains, there are instances in which a patient's
entire stay in the hospitals, sometimes spanning as much 16 days, is classified
as an outpatient hospital stay. Therefore, all physical therapy services
received during this period as of October 1, 2012, will count toward the
therapy cap. "We believe that this is unfair to these patients as it may
limit their access to physical therapy in the outpatient setting, when in fact
these services should have been billed as inpatient services," says
APTA.